TNAG-0182-FCO40-218-Defence-contributions-1969 — Page 105

Nevertheless, I think we can well argue that the Governor's statement

as recorded was shorthand for saying that Hong Kong had an interest

in any means of reducing the cost of the unit because the Colony

would be contributing to that cost; and that the Governor did not thereby accept Hong Kong's laibility for the full cost.

(C) Political Objections to reopening current defence contribution

agreement

The Governor has said that to reopen the current agreement to

take account of the fighters would make his task of obtaining funds for this purpose "almost hopeless" and would prejudice the negotiations.

We ourselves have been consistently taking the line in Whitehall that

any reopening was out of the question on general political grounds.

The last agreement had not run its full course before we insisted upon reopening it in the course of the Defence Expenditure review. negotiations of 1966 engendered a great deal of ill-feeling and

Hong Kong set much store on the new agreement running for four years.

To reopen it now, in the aftermath of confrontation when Hong Kong is

looking to the UK for signs of reassurance and support, could have severe repercussions on confidence.

The

(D) Timing of move to re-establish a fighter presence in Hong Kong

Because we cannot raise the question of a Hong Kong contribution

to the cost of the fighter unit in the context of the current defence contribution agreement (expiring March, 1971), the need to re-establish the unit in the Colony in March 1970 needs examination. The

Governor's letter implies that he would rather forego the unit than run the risks of trying to obtain funds for it for 1970/71. But an alternative is to postpone its positioning in Hong Kong until 1971 (the date we originally envisaged). The only arguments we can see for 1970 are that at that date Hong Kong becomes an independent

command and a Hunter squadron in Singapore is due for disbandment. If during 1970/71 air cover cannot be provided as now from Singapore then presumably it can be provided from the UK (as it would have had to be provided if the decision had gone against an air presence in the Colony). Postponement until 1971 should therefore be an acceptable alternative.

/5.

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